Dear colleagues, I went through the contents of the research report. What the research revealed is only the brighter side of the issue. What are the costs? The caste teach how to prevent other communities from entering the business, keeps all the business activity out of any public scrutiny, above all practice economic, social and anthropological squatting. Do you think anyone else of different caste can enter the businesses of these castes? No. The access to finance is limited to the members of the caste. We are trying to think community as caste.No. Caste is narrowest and you have to be born into the caste. It prevents competition. The surplus generated is used to create institutions that will propagate caste preventing social mobility and social welfare. The surplus created is used to squat into other businesses. No other caste can thrive in the business of borewells; the private transportation is run by the same caste men; the educational institutions are run only for them and whatever left over is given to others. They form caste panchayts ( similar to cop panchayts in the north of India) and dictate that no intercaste marriages to take place and try to preserve the tribal instincts. The caste groups slowly eat away the social fabric that the Indian constitution tried to build. I think we should stop this romantisization of this institution know as caste that made India slave for 800 years. As it has been pointed out by one of our colleagues, historians have a different view. Why we are ruled by foreign rulers? Caste ensured that we are divided. Only a small percentage of people who owned economic resources and large mass who are deprived is a recipe for aggression. Some caste groups as rightly pointed out by Chief Minister of Tamilnadu promote hatred and violence which are based on the outcome of the caste glorification. The economic benefits of casteless society are visible as dreamt by Gandhiji, Nehruji and other founding fathers of this country's constitution. The castist society will be a cancer that will appear to be growth but ultimately lead to death. One of the greatest enlightenments is the certificates given by foreign institutions. SKS Finance was portrayed as greatest organization that is going to deliver us from poverty. The reality was different. History is filled with such examples. It is time we should have right business schools, addressing the issues of Indian competitiveness such as values, spirituality, family ethics, environmental sensitivity and above all considering vasudivaka kutumbakam which no one in the world practice. I wish not to consider this as a rejoinder to my teacher S.Gurumurthy, whose thoughts I always respect. But as a contrarian view of how caste is likely to create distortions in the economy and society.
Please do share your thoughts.
Regards
Dr.K.Prabhakar
On Wed, Jun 5, 2013 at 11:22 AM, kiran paranjpe <kdparanjpe@rediffmail.com> wrote:
Dear Sir, The Essay by Mr Gurumurthy tells us of an important facet of Business life in India. The so called Community Schools of Business is a fact of our economic life. The object of the Community schools is not only to nurture the new entrepreneurs but also to prevent the entry of entrepreneurs not belonging to the community. That this has been in India for a long time is a fact attested by the historians. In these 'schools" there are no formal degrees that are awarded but the students acquire adequate knowledge of their field through sheer contact with their peers, elders who teach the nuances of managing businesses that have stood the test of time.
It is unfortunate, that we do not have a model of the community school of business for research as a profession.Any guesses for this?
Best Regards,
K.Paranjpe
On Tue, 04 Jun 2013 10:14:18 +0530 wrote
>
Communities as
open-air business schoolsS. GURUMURTHYK.D.Paranjpe
Using the community model,
Tirupur, in Tamil Nadu, became the world leader in knitted garments by the
1990s. — M. Balaji
The Kathiawaris, Nadars and
Gounders have disseminated business skills like no modern business school could
have done.
www.thehindubusinessline.com/opinion/communities-as-openair-business-schools/article4766385.ece
On February 19 this
year, the BBC had reported that armed robbers posing as police broke into the
cargo of a Swiss-bound plane in Brussels airport and spirited away diamonds
worth $50 million (Rs 250 crore). This must have left Surat, the world's largest
diamond handling centre, which sees some Rs 80,000 crore of diamonds
criss-crossing the region in open roads, quite amused. Here, couriers on motor
cycles carry unpolished diamonds worth Rs 50-60 crore day after day from traders
at Surat to the polishing units tens of kilometres away. Polished diamonds are
brought back to traders on motorcycles on open roads without any gun-wielding
security person guarding these diamond couriers.
GUJARAT'S COMMUNITIES
This is possible
because the Surat diamond trading system is entirely based on trust among and
within caste-based communities. Entry into the diamond business, whether as
traders, polishers, or handlers, is regulated and overseen by a system of
community reference and verification. No one without verification can enter the
network.
An instructive research
paper (Yale University, November 2006) on the transition of the farming
community of Kathiawaris, titled From Farming to International Business: The
Social Auspices of New Entrepreneurship in a Growing Economy, traces how the
Kabin Patels (Kathiawaris) entered trade late but formed a new community-based
business network. They moved over from agriculture to international business –
the diamond industry dominated by the Vaishyas, Palanpuri Jains and Parsis –
over just a single generation. In three decades, they have achieved parity in
scale with the Palanpuris and Marwaris. The paper says that the successful entry
of Kathiawaris in the diamond business points to the fact that in businesses
where connections are critical, non-Vaishyas have also had occupational mobility
where opportunities opened up. Thus, contrary to Max Weber's view, caste has
actually made occupational mobility possible. This is because caste familiarity
generates trust, and the caste itself turns into an open-air business school of
self-learning for entrepreneurs, teaching them to build businesses. But are
diamond trade and Kathiawaris exceptions? Just anecdotes? No.
TIRUPUR STORY
Take the Gounder
community in western Tamil Nadu, the equivalent of the Kathiawaris. This is what
the World Bank's World Development Report 2001 says about how the
community that has built a global knitwear business.
"By 1990s...Tirupur was
a world leader in the knitted garments industry. The success of this industry is
striking…What is behind the story of this development? The needed capital was
raised within the Gounder community, a caste relegated to land-based activities,
relying on community and family networks…These networks were viewed as more
reliable in transmitting information and enforcing contracts than banking and
legal systems that offered weak protection to creditors' rights." The community
network which promoted entrepreneurship based on self-learning also trained new
entrants the knitwear business and customer management. Very much an open-air
business school, isn't it?
Both the Kathiawaris
and Gounders were land-owners. But even the landless have become entrepreneurs.
Turn to the Sankagiri transport cluster in western Tamil Nadu, the second
largest centre for lorry traffic in the country. Some 90 per cent of the
Sankagiri truck owners were agriculturists and a fifth were cattle grazers. They
now own the largest population of Taurus vehicles in the country. Seven out of
10 Sankagiris are now involved in transport-related activities, according to
Indian Models of Economy, Business and Management by Prof P
Kanagasabapathi.
Tiruchengode is the
next stop. In the 1960s, a severe water crisis forced Tiruchengode's farmers to
jointly buy a rig to dig deep bore-wells. But seeing the demand for such wells,
they successfully turned this into a business that soon spread over to
Karnataka, Andhra Pradesh, Maharashtra, Madhya Pradesh, Rajasthan and Odisha.
Today Tiruchengode
boasts of the largest providers of bore-wells in the country, according to Prof
Kanagasabapathi. The open-air learning process led to training and initiating
others into the business, in a way no modern business school could have done.
OLD TREND
Studies on the
Chettiars show how the community was able to internationalise based on their
networks and a culture of training sons for the business, embracing best
practices, and replicating domestic social structures overseas. Research about
the Nadar community's economic and business models reveal how the Nadar
Uravinmurai' (relation-based network) evolved as an endogenous and
innovative trade-linked caste organisation. Uravinmurai was set up for
safe movement of the community's goods and later became an instrument for
self-discipline and collective learning. There are some 1,000 Uravinmurai
in Tamil Nadu. Again, aren't these cases of open-air business schools spreading
knowledge of trade and business?
These are just
illustrations, not exhaustive of the phenomenon all over the country,
particularly in over 2,800 artisan and industrial clusters. Apart from the
traditional Banias, the Marwaris, and the Sindhis, there is also the rise of the
Ramgadias of Punjab, the Jatavs of Agra and Kanpur, and the Kammas of Andhra.
Harish Damodaran, in his book India's New Capitalists: Caste, Business and
Industry in a Modern Nation,calls this the'Field to Factory' movement,
signifying the expansion of the social base of Indian business 'beyond the
Bania'. The 2005 Economic Census indicates that the rise of backward classes in
businesses is now becoming a massive entrepreneurial movement in which the state
has had no role.
But this cannot be as
recent as it appears. It has to be in the still unexplored periods of Indian
history. Studies of Paul Bairoch (1983) and Angus Maddison (2001-2010) have
indeed found evidence of extensive economic activity in India, which could not
have been confined to just one Vaishya caste. According to the American
Journal of Economics and Sociology (April 1993), the Mauryan model of
export-led economic growth had secured a huge export surplus for India. The
economic history of the Greco-Roman world tells us that India ran a continuous
trade surplus with Egypt that worried Roman rulers, the annual value of which in
today's gold prices would be $178 million.
Marco Polo's travelogue
says that the gold-silver arbitrage ratio was 1:6 in India which was the other
way round in Europe, indicating the huge trade surplus India must have achieved
over centuries. The Bank of International Settlements Report (1934-35)
says that during the period 1493 to 1930 (for 427 years), India's gold
absorption rate was 14 per cent of the world's production, which means that much
was perhaps the share of India's trade surplus as against the rest of the world.
Again, Marco Polo says that the size of India's merchant ships was larger than
its contemporaries. India's merchant navy had 40,000 ships during Akbar's time
and 34,000 with a capacity of more than a million tonnes when the British came
to India. When the British left, India's merchant navy's strength had dwarfed to
couple of lakh tonnes.
A study by the Centre
for West Asia Studies at the Jamia Millia Islamia University affirms that, in
Akbar's time, consumption in India was higher than in Europe. According to
colonial records studied by Dharampal, a well-known Gandhian, the consumption
pattern of the high-, middle- and low-income groups in Cudappah and Bellary in
the 17th century showed virtually no difference in 23 of the 24 items accounted
for.
Economic history
India could never have
been an agrarian economy then as it is now, given India's share in world
manufacturing at 24.5 per cent in 1750 and with industrial employment then
estimated at between 21 and 28 per cent. It was the collapse of Indian industry
during the colonial period that drove people back to the farms. This kind of
widespread and widely shared economic activity would not have been confined to
the minuscule Bania community.
There is need to
recall, re-author, and review Indian economic history, which is even now a
prisoner of the Marx-Weber perspectives.
This need is no more
academic. After the global economic meltdown in 2008, when efficient market
theories and model building approaches were heavily questioned, Bradford Delong,
Professor of Economics at University of California, Berkeley, wrote that it was
not an economic crisis but 'economics in crisis'. He called upon schools of
economics to generate fewer efficient market theorists and modellers and more
economic historians.
Subsequently, Howard
Davies, who was the first chairman of the United Kingdom's Financial Services
Authority (1997-2003) and formerly Director of the London School of Economics,
cited the view of the Institute of New Economic Thinking (that consists of
eminent economists, financial minds and businessmen), insisting on teaching more
economic history. This is equally a call for India to trace its business
propensities back in time.
(The author is a
commentator on political and economic affairs, and a corporate advisor)
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Dr.K.Prabhakar,
Professor,
School of Management,
SRM University,
SRM Nagar, Kattankulathur-603203.
Kancheepuram District,Tamilnadu,India.
Tel: 044-27452270 Fax:044-27453903
Residence
no,9, Sivan koil north mada street, Villivakkam,Chennai -600049
91-44-43857197
9790701612
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